The number of Blue Cross and Blue Shield plans is expected to decline by more than one-fourth within five years -- to between 25 and 30 -- from 42 today, and Blues plans' mergers will drive continued consolidation within the managed-care industry as a whole, the CMS said in its latest managed-care industry update. Some 134 Blues plans operated in 1986, the highest total ever, while the total number of HMOs peaked in 1997 at 652, the report said. Some 490 HMOs operated in 2002 and that's expected to fall to 425 by 2004. Meanwhile, profit margins are growing across the industry, the CMS said. At publicly traded managed-care companies, profit margins were 4.4% in 2002, compared with 1.8% in 1999. Publicly traded plans are expected to maintain or expand profit margins this year by boosting premiums an average of 12% to 13%, compared with medical-cost growth of 11% to 12%, the CMS said. Blues plans, publicly traded Medicaid HMOs and not-for-profit Kaiser Permanente are seeing similar margin improvements, it noted. Read the CMS report. -- by Laura B. Benko
Field of Blues plans, HMOs shrinks as profits grow
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